This will be just one aspect of the infinitely long debate about where V will be set, but the same discussion preceeding GTAIV applies. The problem with Baltimore/Philly/DC is that, fundamentally, neither Baltimore or Philadelphia are any different from New York, or any other North East / Upper East Coast port city. Philadelphia & Baltimore are practically the same. Of course, people who live there or visit there will say, "No! They're not! They're so different!" But from a videogame perspective, they are both East Coast port cities with similar histories, similar demographics, similar neighborhoods, similar looks and feel, and neither of them are all that different from New York City. Now, where I'd tentatively distance myself is with Washington DC, which has a noticeably different feel from Baltimore and Philadelphia -- largely because it is the capitol city, and it is just different enough from New York... No sky scrapers, a fascinating street structure, and DC skirts the very real cultural division of North & South in the United States, where Baltimore, Philly, New York City, Boston, and major towns north of DC are very much northern cities with northern sentiments. Travelling from North to South along 95, DC is the first major East Coast city that feels different.
So, I could see DC.
But, Baltimore and Philly are fundamentally identical to each other from a videogame perspective, and end up becoming just 'baby New Yorks.' For what it's worth, I'd say the same thing about Boston, I don't think that there would ever be a GTA set in Boston because Boston is too similar to New York, except the possibility exists only because of the bizarre cultural phenomenon that American media still has with Boston.
*edit*
Caveat: The Wire is the best shit ever. But if Rockstar were going to capitalize on the Wire, it would have been with IV, not like 6 years after the Wire finished.